When it comes to hardwood, consumers tend to gravitate to either value priced product or higher-end products, according to industry executives, leaving a gap in the middle price range. But as the economy goes into recovery mode, consumers are expected to focus more on quality and less on price point.

At the same time, raw material and lumber prices have continued to rise and a number of companies have recently posted price increases on both solid and engineered hardwood products. Mohawk, Columbia, Mannington and Armstrong have all announced price increases in order to maintain a consistent supply of quality products while costs rise. These suppliers said that given rising consumer confidence, the price increases aren’t expected to have a negative impact on sales.

Lee Safrit, Anderson regional manager for the Central U.S., said sales of the company’s upper-end products have grown beyond its expectations over 2011. He said that when a consumer finds a style that appeals to them they are willing to pay more, something not seen as much over the past four years.

“We have seen growth in the highest of high end and the lowest of low end, so I think it’s a mix of both when it comes to consumer price range. I’m beginning to see a change in consumer spending- people are beginning to trade up and our numbers prove it,” he said.
Don Herndon, owner of Classic Wood Floor in Rockledge, Fla., agreed, adding that the retail and builder business is much stronger now than it had been in years past.

“With new construction, the flooring is always base grade but I would say 80-85 percent of people upgrade from builder’s basic flooring. People that are staying in their house see flooring as an investment so they are saving and spending because they want quality product. We’re seeing an uptick in prices because consumers want quality floors more than low-end pricing,” said Herndon.

Safrit of Anderson added, “At retail, I see the mid-priced market leveling out; I don’t see it having a big increase or decrease. The lower-end priced product grouping is increasing however, interestingly enough, the high-end product category seems to be increasing too.”
Dan Natkin, director of wood and laminate business at Mannington, said that while style is still the primary deciding factor for consumers, value remains a high priority when choosing a floor.

“In wood, the retailer and the consumer are in the $4.99 to $6.99 price range and less — that’s really where a significant portion of the market is. Consumers are looking for value but still aspire to having hardwood floors in their homes. However, there’s still a nice piece of the market in the $7.99 and up price range,” he said adding that $4.99 to $6.99 remains the sweet spot “because of technology and new visuals there are a lot more options in that range today.”
Safrit said he has traveled to a number of markets over the last four weeks and within every one of those markets he is seeing similar trends when it comes to consumer spending. And that is a good sign, he added.

“We have seen the trend of higher end goods selling in all of these markets which is good for the hardwood category and that’s not been the case over the last three or four years,” said Safrit.
Greg Kemp of Kemp’s Huntsville Flooring said that, interestingly, he finds price points to be regionalized. However, he said, one sentiment does remain true throughout the country — when a customer finds a flooring they like they are willing to pay any price.
“The consumer either wants an exotic or handscrape which typically cost more or they want the cheapest oak they can get. Occasionally you’ll get a customer who wants what they want and they’ll be willing to spend $10-$15 a foot but that is few and far between,” explained Kemp.

Manufacturers post increases
Due to increased transportation and anticipated inflation in raw material prices Armstrong recently announced a 6 percent price increase on both its solid and engineered hardwood flooring in the United States and Canada.
Columbia and Mohawk too have announced a six percent increase for pricing on solid and select engineered hardwood products due to rising raw material and lumber costs.

Mannington also posted a 6 percent increase on its engineered wood. “Generally what’s happening, companies are going up on solids, and because we’re at the forefront of possibly seeing inflation on raw materials at a much higher percentage- there’s less labor and more material on solid. I think prices will rise in the next 4 years in the case of engineered because of illegal dumping cases artificially lowering prices in the market. I do believe prices are generally going to run in the 5 percent to 8 percent price increase range next year. Do I think it will drive people to other alternatives? No, wood is still an aspirational product in flooring,” explained Natkin.